"They are stealing everything they can lay their hands on," Alida Benedetti, a lawyer, said in one of numerous telephone interviews by the Miami Herald with Panama City residents. "Cars are stuffed to the roof."

Members of Noriega's Dignity Battalions, armed with automatic rifles, forced open the iron gates of posh department stores along Via Espana, Calle 50, Avenida Central, and other major commercial thoroughfares, clearing the way for hordes of looters.

"The merchants are totally disgusted at the way that the United States has handled this: They concentrated on military objectives and left the people unprotected," said Joe Salterio, a Panamanian banker. "They've left the city a no-man's land."

U.S. troops began moving into the city center Thursday, the second day of the U.S. invasion, after subduing government military bases on the periphery Wednesday.

U.S. rockets and artillery shells appeared to have left large numbers of civilians dead, many of them killed in attacks on Panama Defense Forces soldiers dressed in civilian clothes and still operating in densely populated working class areas. No official civilian casualty figures have been released.

Civilian corpses were visible on the streets in several neighborhoods.

U.S. warplanes and helicopters roared over the poor community of San Miguelito on Panama City's eastern outskirts during an early morning battle, apparently rocketing and strafing Panamanian soldiers, according to Winston Robles, a prominent Panamanian journalist.

Two hours after the fighting subsided in San Miguelito, another battle broke out along the Trans-Isthmian Highway, about two miles to the west. Robles said it appeared that U.S. forces had engaged a large group of Panamanian soldiers retreating from the San Miguelito fighting.

Some residents complained that the high-caliber weaponry used by U.S. forces in the densely populated neighborhood had left many civilians dead.

Unconfirmed estimates of the civilian dead ranged from more than a hundred to more than a thousand.

"They are killing civilians openly," said Luis Manuel Martinez, one of Noriega's spokesmen. "The American troops are searching house to house, opening fire to finish the armed resistance."

"These casualties could bring very severe political consequences," said Ambler Moss, U.S. ambassador to Panama during the Carter administration. "The sentiment in Panama was initially pro-invasion, but this can turn if the casualties are high."

Several neighborhoods on the capital's eastern outskirts found themselves without running water, though service continued in most sectors of the capital, Robles said.

Residents, most holed-up in their homes, learned of the developing intervention by watching Channel 8, U.S. Armed Forces television. All other channels were blacked out. U.S. forces blasted Radio Nacional, the government station, off the air Wednesday.